KRS 304.18-114: Conversion health insurance policy for member terminated under

group policy -- Terms -- Situations in which conversion coverage need not be

granted.

(1) As used in this section:

(a) "Conversion health insurance coverage" means a health benefit plan meeting

the requirements of this section and regulated in accordance with Subtitles 17

and 17A of this chapter;

(b) "Group policy" has the meaning provided in KRS 304.18-110; and

(c) "Medicare" has the meaning provided in KRS 304.18-110.

(2) An insurer pr oviding group health insurance coverage shall offer a conversion

health insurance policy, by written notice, to any group member terminated under

the group policy for any reason. The insurer shall offer a conversion health

insurance policy substantially si milar to the group policy. The former group

member shall meet the following conditions:

(a) The former group member had been a member of the group and covered under

any health insurance policy offered by the group for at least three (3) months;

(b) The for mer group member must make written application to the insurer for

conversion health insurance coverage not later than thirty -one (31) days after

notice pursuant to subsection (5) of this section; and

(c) The former group member must pay the monthly, quarte rly, semiannual, or

annual premium, at the option of the applicant, to the insurer not later than

thirty-one (31) days after notice pursuant to subsection (5) of this section.

(3) An insurer shall offer the following terms of conversion health insurance coverage:

(a) Conversion health insurance coverage shall be available without evidence of

insurability and may contain a pre -existing condition limitation in accordance

with KRS 304.17A-230;

(b) The premium for conversion health insurance coverage shall be a ccording to

the insurer's table of premium rates in effect on the latter of:

1. The effective date of the conversion policy; or

2. The date of application when the premium rate applies to the class of

risk to which the covered persons belong, to their ages, and to the form

and amount of insurance provided;

(c) The conversion health insurance policy shall cover the former group member

and eligible dependents covered by the group policy on the date coverage

under the group policy terminated.

(d) The effective date of the conversion health insurance policy shall be the date

of termination of coverage under the group policy; and

(e) The co nversion health insurance policy shall provide benefits substantially

similar to those provided by the group policy, but not less than the minimum

standards set forth in KRS 304.18 -120 and any administrative regulations

promulgated thereunder.

(4) Conversion health insurance coverage need not be granted in the following

situations:

(a) On the effective date of coverage, the applicant is or could be covered by

Medicare;

(b) On the effective date of coverage, the applicant is or could be covered by

another group coverage (insured or uninsured) or, the applicant is covered by

substantially similar benefits by another individual hospital, surgical, or

medical expenses insurance policy; or

(c) The issuance of conversion health insurance coverage would cause the

applicant to be overinsured according to the insurer's standards, taking into

account that the applicant is or could be covered by similar benefits pursuant

to or in accordance with the requirements of any statute and the individual

coverage described in paragraph (b) of this subsection.

(5) Notice of the right to conversion health insurance coverage shall be given as

follows:

(a) For group policies delivered, issued for delivery, or renewed after July 15,

2002, the insurer shall give written notice of the r ight to conversion health

insurance coverage to any former group member entitled to conversion

coverage under this section upon notice from the group policyholder that the

group member has terminated membership in the group, upon termination of

the former group member's continued group health insurance coverage

pursuant to KRS 304.18 -110 or COBRA as defined in KRS 304.17A -005(7),

or upon termination of the group policy for any reason. The written notice

shall clearly explain the former group member's right to a conversion policy.

(b) The thirty-one (31) day period of subsection (2)(b) of this section shall not

begin to run until the notice required by this subsection is mailed or delivered

to the last known address of the former group member.

(c) If a former group member becomes entitled to obtain conversion health

insurance coverage, pursuant to this section, and the insurer fails to give the

former group member written notice of the right, pursuant to this subsection,

the insurer shall give written notice t o the former group member as soon as

practicable after being notified of the insurer's failure to give written notice of

conversion rights to the former group member and such former group member

shall have an additional period within which to exercise his conversion rights.

The additional period shall expire sixty (60) days after written notice is

received from the insurer. Written notice delivered or mailed to the last known

address of the former group member shall constitute the giving of notice for

the p urpose of this paragraph. If a former group member makes application

and pays the premium, for conversion health insurance coverage within the

additional period allowed by this paragraph, the effective date of conversion

health insurance coverage shall be the date of termination of group health

insurance coverage. However, nothing in this subsection shall require an

insurer to give notice or provide conversion coverage to a former group

member ninety (90) days after termination of the former group member's

group coverage.